Define renewable energy targets, solar firm urges government

MANILA, Philippines - A Norway-based solar energy developer is urging the Philippines to make installation targets for renewable energy (RE) projects under the feed-in tariff (FIT) scheme readily available on an annual basis to attract more investors in the field.

Structuring the market and providing targets on a yearly basis would help to lower the costs of RE technologies, Scatec Solar senior vice president for business development Terje Osmundsen said during the recently-held PowerTrends 2015 Forum.

“The challenge in the Philippines today is we don’t know what happens after March 2016 to [RE] power, particularly solar. Developers don’t know the regime or how much they will build,” he said.

“I would say the experience from most markets is that you need a period of predictable Feed-in Tariff for the industry to develop and you need significant volumes to auction,” Osmundsen added.

Last June, the Department of Energy (DOE) issued a circular for the adoption of an auction system for future RE power projects that would receive incentives under the FIT scheme.

Under the scheme, a set of incentives is given to power developers investing in the more cost-intensive RE sector.

Originally, the DOE’s installation targets allocated 250 megawatts (MW) for run-of-river hydro and biomass power projects, 200 MW for wind power and 50 MW for solar power.

Due to strong demand, the DOE has increased the installation target for solar power to 500 MW while the 400 MW allocation for wind power is still awaiting for approval.

In auctioning future RE projects, Osmundsen urged Philippine energy authorities to study developments in other markets to ensure a level-playing field.

“The most important thing is you announce targets per year. I think that auctioning could be a good solution if you have a professional system of pre-qualifying, monitoring and evaluating the proposals. But I would recommend Philippine authorities to study the system in Brazil and South Africa,” he said.

Osmundsen noted the Philippines has big potential in RE development, especially in solar power.

“We see the Philippines would be an important market and we think there would be room for international integrated players like us as the market matures,” he said.

With improvements in the Philippine RE sector, the Norwegian solar power developer would be interested in investing in the country.

“We will prioritize markets where we see big opportunities. It’s too early to say but it would be natural for us to have an ambition to set up a couple of hundred MW of photovoltaic (PV) projects in the Philippines,” Osmundsen said.